US court finds Google has illegally built “monopoly power” and dominated the online advertising market.
On April 17, Judge Leonie Brinkema of the Eastern District Court of Virginia ruled in a lawsuit between the US Department of Justice (DOJ) and Google. In a 115-page ruling, Google was found liable for “intentionally merging and maintaining monopoly power” in the market for publisher ad servers, as well as the market for advertising transactions between buyers and sellers.
The ruling will pave the way for another trial to determine what Google must do to fix its problem, including potentially divesting part of its $31 billion online advertising business or even selling it. However, no timeline has been set.
Google currently operates a platform that allows websites to host and manage digital advertising inventory. In addition to exchanging ads through an exchange model, the technology allows news publishers and other online content providers to make money by selling their own ads.
"In addition to depriving rivals of the ability to compete, Google's conduct harms its publisher customers, the competitive process on the Internet, and consumers' access to information on the web," Brinkema said.
However, she also dismissed one of the DOJ's complaints related to Google's online advertising network. One of those was the search company's acquisition, which it said did not violate antitrust.
Lee-Anne Mulholland, Google's vice president of legal affairs, said they would appeal. "We won half the case and will appeal the other half," Mulholland told CNN. "The court found that our tools for advertisers and our acquisitions, such as DoubleClick, did not harm competitors. We disagree with the court's decision on tools for publishers. They have many options, but they choose Google because our technology is simple, affordable and highly effective."
The DOJ has not commented.
Early in 2023, the DOJ and eight US states filed a lawsuit against Google, accusing the company of harming competition through its dominance in the online advertising market and calling for the company to be broken up. Google later said the DOJ's argument was "flawed" and would "slow innovation, raise advertising costs, and make it harder for thousands of small businesses and publishers to thrive."
This is the second antitrust ruling against Google. In August 2024, the company received a similar ruling from a district court in Washington DC over its online search monopoly. A hearing is scheduled for next week, where Google could face an order to sell its Chrome browser and take other steps to end its dominance in online search.
Observers, technology critics, and media organizations welcomed the ruling. The new development could force Google to divest some of its online advertising business, but the DOJ won't win outright, according to William Kovacic, a professor at George Washington University. "The general idea in antitrust cases is that the remedy should be proportionate," Kovacic said.
Sacha Haworth, CEO of the Tech Oversight Project, called the decision a “clear victory for Americans.” “For years, Google has had unchecked power over the digital advertising market. They have used it to strangle the media industry and impose a middleman tax on everything bought online,” Haworth said.
Senator Elizabeth Warren called it “a major step forward in the fight to break up Big Tech and the culmination of years of efforts to curb abusive behavior by tech companies.”
Michael Ashley Schulman, chief investment officer of Running Point Capital, called the ruling a “watershed moment” for Google and the tech sector, showing the U.S. is willing to apply “strong structural remedies” in antitrust cases.
“This could hurt big tech companies like Amazon and Meta that operate similarly integrated ecosystems,” Schulman told Reuters.